Things are looking up for Pennsylvania's year-end deficit, due to higher-than-expected tax revenue collections in March and April, when tax revenue collections were 3% higher than the state expected.

So far, the state's shortfall is about $288 million. Back in December, the Corbett administration predicted it would be a $719 million deficit by the end of the fiscal year in June.

So, what does that mean for next year's budget? Department of Revenue Secretary Dan Meuser said his office will wait until tax collections for May are in before making any changes to revenue estimates.

"We do expect some positive impact on '12-'13, but at this point, the level of positive impact is yet to be determined. We'll know a lot more in two to three weeks," said Meuser.

Matthew Knittel, head of the state's Independent Fiscal Office, said Tuesday the economy does appear to be recovering.

"We think the labor market looks a little better, the housing market even looks a little better, so we do think the recovery is continuing in Pennsylvania, and nationally as well," said Knittel. "So we think there's a bit of an upside here, I mean all of the signs are pointing in that direction."

But wild cards remain. Corporate net income could dip, said Knittel. Sales and use taxes have been coming in higher, but some say the unusually warm weather has caused a short-lived burst in consumer spending.